Americans expect the housing market to improve overall, maintaining mainly positive attitudes about home prices and the rental market, while more expect mortgage rates to increase, according to Fannie Mae’s latest survey.
At 43 percent, the share of those surveyed who believe home prices will go up in the next 12 months reached the highest level recorded by Fannie Mae, up 6 percentage points over November.
The percentage who think mortgage rates will go up continued to rise, increasing by 2 percentage points to 43 percent, the highest level since August 2011.
The strengthening belief by Americans that these housing indicators will climb in 2013 may inspire a boost in home purchase activity during the coming months, Fannie Mae concludes.
Consumers’ outlook toward the economy and personal finances is more unsettled, compared to their view of housing, following a show of optimism in November. Concerns over the “fiscal cliff” – expiring tax breaks – most of which were finally extended last week by Congress.
Fannie Mae’s National Housing Survey polled 1,002 Americans last month to gauge attitudes toward the housing market, the economy, household finances, and overall consumer confidence.
“The highest share of consumers in the survey’s two-and-a-half-year history expect home prices to increase in the next 12 months,” said Doug Duncan, senior vice president and chief economist of Fannie Mae. “This view is consistent with Fannie Mae’s expectation that home prices will rise going forward on a national basis.”
Here are some survey highlights:
- At 4.4 percent, the average 12-month rental price expectation hit the highest level since the survey’s inception, up 0.4 percent over last month.
- Forty-nine percent of those surveyed say home rental prices will go up in the next 12 months, a slight increase from last month.
- The share of respondents who said they would buy if they were going to move decreased slightly to 66 percent.
The Economy and Household Finances
- At 39 percent, the share of respondents who say the economy is on the right track fell by 5 percentage points from last month’s survey high.
- The percentage who expect their personal financial situation to get worse over the next 12 months continued to rise, reaching 20 percent and the highest level since August 2011.
- Twenty-two percent of respondents say their household income is significantly higher than it was 12 months ago, a slight increase over last month and a 5 percentage point increase over September.
- Thirty-seven percent reported significantly higher household expenses compared to 12 months ago, a 3 percentage point increase over the past month and the highest level since December 2011.